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Chair Powell Questioned On The June SEP

FED
  • Q:How do you target wage inflation without pushing an economy into recession? Are you concerned about union negotiations pushing wages up?
    • A: I don't think we're targeting wage inflation, we're looking for a broad cooling in labor market conditions. Wages have been gradually moving down. We're making progress there.
    • Not our role to comment on contract negotiations.
  • Q: SEP suggests you would cut rates as you get overall / core PCE around 3%. Is the level important or the speed of the inflation important?
    • A: I think you take both into account when you start cutting rates, would depend on a wide range of things. When people are writing down rate cuts next year it is a sense that inflation is coming down and we're comfortable that it's coming down and time to start cutting rates. But I mean there's a lot of uncertainty between what happens in the next meeting, let alone the next year, the year after that. So it's hard to say exactly what happens there.
    • I'm not saying that at all [if rates were stubbornly in the high 2s you wouldn't cut rates). I'm not giving any numerical guidance. We'd be comfortable cutting rates when we're comfort cutting rates. That won't be this year, I don't think. Many people wrote down rate cuts for next year. That's just going to be a judgment that we have to make a year from now.
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